CoreLogic: Delinquency Rates Approach Pre-Pandemic Levels
CoreLogic, Irvine, Calif., said delinquency rates on all mortgages in the U.S. fell in July to the lowest rates since March, edging closer to pre-pandemic levels.
The company’s monthly Loan Performance Insights Report said 4.2% of all mortgages in the U.S. were in some stage of delinquency (30 days or more past due, including those in foreclosure), a 2.3-percentage point decrease from a year ago, when it was 6.5%. While overall delinquencies remain above the February 2020, pre-pandemic rate of 3.6%, this is the lowest rate since last March.
Other key findings:
• Early-Stage Delinquencies (30 to 59 days past due): 1.1%, down from 1.5% in July 2020.
• Adverse Delinquency (60 to 89 days past due): 0.3%, down from 1% a year ago.
• Serious Delinquency (90 days or more past due, including loans in foreclosure): 2.8%, down from 4.1% a year ago. While still high, this is the lowest serious delinquency rate since May 2020.
• Foreclosure Inventory Rate: 0.2%, down from 0.3% in July 2020. This is the lowest foreclosure rate recorded since CoreLogic began recording data (1999).
• Transition Rate (the share of mortgages that transitioned from current to 30 days past due): 0.6%, down from 0.8% in July 2020.
The report noted, however, despite the improvement, one million people nationwide have been unable to make payments for at least half a year. The share of borrowers six months or more past due made up about one-half of the total delinquencies in July, with many still leaning on options such as forbearance, loan modifications and other government provisions to keep from entering foreclosure.
“Declining delinquency levels are an encouraging sign of economic improvement and the durability of the housing market,” said Frank Martell, president and CEO of CoreLogic. “Looking ahead to the end of many forbearance and other assistance programs, many borrowers receiving support must consider their financial options, including a potential loan modification, to ensure they stay current and keep foreclosures at bay.”
“Even if loan modification or income recovery is unable to help delinquent homeowners become and remain current on their payments, the double-digit rise in home prices may help them avoid a distressed sale,” said Frank Nothaft, chief economist with CoreLogic. “Homeowners with substantial home equity are far less likely to experience a foreclosure sale, and fortunately, the CoreLogic Home Equity Report found the average owner gained $51,500 in equity in the past year — a five-fold annual increase.”
The report said all U.S. states logged a decrease in annual overall delinquency rates, with New Jersey (down 3.9 percentage points), Florida (down 3.5 percentage points) and Nevada (down 3.3 percentage points) leading with the largest declines.
All U.S. metros also posted an annual decrease in overall delinquency rates in July, with Miami (down 5.4 percentage points), Laredo, Texas (down 5.1 percentage points) and Kingston, N.Y. (down 5 percentage points) posting the largest decreases. Nevertheless, elevated overall delinquency rates remain in some metros, including Odessa, Texas (11%); Pine Bluff, Ark. (10.6%) and Laredo, Texas (10.5%).